Forex Flash: USD/JPY remains a ‘buy on dips’, targeting 85.00 – UBS

Forex Flash: USD/JPY remains a ‘buy on dips’, targeting 85.00 â€" UBS

<!--TITOL:

Forex Flash: USD/JPY remains a buy on dips, targeting 85.00 UBS

FITITOL--> FXstreet.com (Barcelona) - The Japanese yen is reverting its initial trend on Tuesday after BoJ officials were on the wires “warning” investors about further easing, propelling the cross from levels sub 81.00 to almost 81.30

Ahead in the week the BoJ will hold its second monetary policy meeting, adding an update of the semi-annual economic forecasts.
In the opinion of M.Mohi-uddin, Director of Foreign Exchange Strategy at UBS, the BoJ estimates regarding the inflation in the upcoming quarters would still be under its 1.0% YoY target, setting the scenario for another additional ¥5-10 trillion in the asset purchase programme in the very near term.

The expert goes on saying that BoJ officials and mainly governor M.Shirakawa have recently increased the rhetoric about weakening the yen, against a backdrop of stagnation of the Japanese fundamentals along with tepid outlook in the rest of the main economies.

As a result, he concludes, …”we continue to see USDJPY as a buy on dips in its current 80.00-85.00 range and target a breach of the top end of the range over the next three months…”.